Illinois Imposes New Tax on Esports Betting

The Illinois government has introduced a new 50-cent tax per wager on sports betting, including esports, effective September 1, 2025. This regulatory change, enacted through recent legislation, applies to all bet sizes and has sparked debate among operators and bettors. The tax aims to boost state revenue but raises concerns about its impact on the growing esports betting market.

Key Takeaways

• Illinois’ new 50-cent-per-wager tax affects all esports betting transactions.
• Operators like FanDuel, DraftKings, and Bet365 face increased costs, potentially impacting odds or fees.
• Bettors express frustration, citing reduced profitability and potential market deterrence.

The Illinois Betting Act’s latest amendment, effective September 1, 2025, mandates a 50-cent tax on every sports bet, including esports wagers, regardless of stake size. This move targets the rapidly expanding esports betting sector, which has seen significant growth in titles like League of Legends, Counter-Strike 2, and Valorant. Posts on X reflect bettor discontent, with users like @netgearuser calling the tax “greed to the fullest,” arguing it could discourage casual bettors and reduce market liquidity. Operators such as FanDuel, DraftKings, and Caesars have complied, with Bet365 also announcing policy adjustments to accommodate the tax.

This development poses challenges for Illinois’ esports betting ecosystem, one of the largest in the U.S., where 19 states have legalized esports wagering. The tax could pressure operators to adjust odds or pass costs to consumers, potentially making Illinois less competitive compared to states like Nevada or New Jersey, which have more established frameworks without per-bet taxes. Industry experts warn that smaller operators may struggle, as the tax could erode margins on low-stakes esports bets, which are popular among younger audiences.

The Esports Integrity Commission (ESIC) has not yet commented, but its partnerships with operators like GG.Bet emphasizes the need for robust integrity measures amidst regulatory shifts. Illinois’ move aligns with global trends, such as Germany’s stricter gambling oversight, but contrasts with jurisdictions like Curacao, which prioritize operator flexibility. For bettors, the tax may reduce the appeal of betting on major tournaments like the LoL World Championship or CS2 Majors, potentially pushing activity to offshore platforms with looser regulations. Operators must now balance compliance with maintaining attractive betting markets.

Sources: SBC News, X Posts